On Friday, the markets reached a new high, with the BSE Sensex rising 277.41 points, or 0.48 percent, to close above 58,000 for the first time. The Nifty closed at 17,324, up 89 points or 0.52 percent.
In two days of market rally, investors’ wealth increased by Rs 4 lakh crore, reaching a new all-time high of Rs 2,54,21,578.88 crore.
The BSE Sensex had risen 514.33 points, or 0.90 percent, in the previous session.
So, what are the factors that are causing the uptick?
The rise of the Sensex and Nifty, according to analysts, is due to five main factors. Strong company earnings, reopening of businesses as the second wave faded, record vaccination rates, hopes of a delayed taper of US Fed asset purchases, and a strong purchasing managers’ index (PMI) and healthy GST numbers are among them.
“Global markets were supported by comments from US Fed Chairman Jerome Powell, who stated that the US central bank will not be in a hurry to raise interest rates. Increased vaccination rates and solid July 2020 GST collections boosted Indian markets even more “Kotak Securities’ executive vice president of equity technical research, Shrikant Chouhan, stated.
How long can this uptick last?
According to analysts, the market is currently in a bull market, which can often surprise on the upside. However, some predict that the upward trend will slow in the second half of the fiscal year, while others predict a correction.
“The markets are currently discounting a significant portion of the earnings storey, and the margin of safety is shrinking; any earnings disappointment, due to slower-than-expected demand recovery or higher-than-expected margin pressure, could lead to a contraction in market valuations,” Unmesh Kulkarni, MD and senior advisor, Julius Baer India, told news agency PTI.
On August 31, the BSE benchmark broke through the 57,000 mark for the first time. Last month, it increased by more than 9%.
With a gain of over 4%, Reliance Industries led the Sensex pack on Friday, followed by Titan, Tata Steel, Asian Paints, and Maruti Suzuki.
Among the laggards were Hindustan Unilever Limited (HUL) and Bharti Airtel.
